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"Greedy" Demand Adjustment in Cooperative Games

Author

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  • Maria Montero

    (School of Economics, University of Nottingham)

  • Alex Possajennikov

    (School of Economics, University of Nottingham)

Abstract

This paper studies a simple process of demand adjustment in cooperative games. In the process, a randomly chosen player makes the highest possible demand subject to the demands of other coalition members being satisfied. This process converges to the aspiration set; in convex games, this implies convergence to the core. We further introduce perturbations into the process, where players sometimes make a higher demand than feasible. These perturbations make the set of separating aspirations, i.e., demand vectors in which no player is indispensable in order for other players to achieve their demands, the one most resistant to mutations. We fully analyze this process for 3-player games. We further look at weighted majority games with two types of players. In these games, if the coalition of all small players is winning, the process converges to the unique separating aspiration; otherwise, there are many separating aspirations and the process reaches a neighbourhood of a separating aspiration.

Suggested Citation

  • Maria Montero & Alex Possajennikov, 2022. ""Greedy" Demand Adjustment in Cooperative Games," Discussion Papers 2022-05, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  • Handle: RePEc:not:notcdx:2022-05
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    File URL: https://www.nottingham.ac.uk/cedex/documents/papers/cedex-discussion-paper-2022-05.pdf
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    References listed on IDEAS

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    Keywords

    demand adjustment; aspirations; core; stochastic stability;
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